Commodities markets summary

Global oil prices fell after a surprising increase in US crude inventories.

US oil benchmark West Texas Intermediate for November delivery shed 47 US cents on the New York Mercantile Exchange to $US102.66 a barrel, dropping for a fifth day in a row.

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European benchmark Brent oil for November delivery fell 32 US cents to $US108.32 a barrel.

The US Energy Information Administration (EIA) said Wednesday that American crude reserves soared by 2.6 million barrels in the week ending September 20.

Market analysts on average had expected a drop of 900,000 barrels.

PRECIOUS METALS

Gold futures rose as investors fear a potential impasse in US budget talks may bolster demand for the metal.

The most actively traded gold contract, for December delivery, on Wednesday rose $US19.90, or 1.5 per cent, to settle at $US1,336.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

The Senate on Wednesday voted to begin debate on a measure to fund government through most of the rest of the year, the next step in what is expected to be a contentious policy clash.

A stalemate between the Democratic-controlled Senate and Republican House of Representatives could create a new drag on spending and the US economy, potentially raising demand for gold as an alternative asset.

BASE METALS

Copper futures closed higher on the London Metal Exchange (LME), boosted by some positive US economic data.

At the PM kerb close on Wednesday, LME three-month copper was up 0.7 per cent at $US7,195 a metric ton.

Aluminium was 0.4 per cent higher at $US1,804 a ton.

A solid set of US economic indicators propped up base metal market sentiment Wednesday. While orders for long-lasting goods such as kitchen appliances edged 0.1 per cent higher on the month in August, new-home sales rose 7.9 per cent -- the fastest pace since January.

Base metals are used in everything from air conditioning units to mobile phones, making their prices sensitive to signs of economic growth.